Should you make the first offer in negotiations? Salary Negotiation Techniques with examples

– Has this ever happened to you? That you finally nailed an offer. It’s time to talk about the salary, and the recruiter ask you “how much you’re getting paid right now?”, in your head you’re like
“no, I don’t wanna tell her” but the next question is: should I tell her the final
number that I’m looking for or should I wait until
she makes the offer? Your heart is pumping
really hard figure out what’s the best strategy. I been to this experience two days ago. I was offered a director of
product manager (position) at another fortune 500 companies. So, the head of product, made me an offer. Before I head out, he ask
this, the same question: “how much you getting paid right now?”, my first reaction was “you know what?” “it is illegal to ask a
salary in Massachusetts” and I told him so, of
course made a joke about it to not make it very awkward. Most importantly, should
I make the first offer, or should I wait until
he give me an offer? Do you know that research
show that 80% of people didn’t want to make the first offer? Because they believe that
first movers are the losers, because in these scenarios, the one who makes the first
offer will lose information and the one receiving the
offer to have more information so that you can negotiate and strategize and negotiate harder. Is it the truth? Research also shows that
there is another thing called ‘anchor effect’, lots
of people didn’t think about, what is anchor effect? Which means whoever makes a first offer are making the anchor effect. Let me give you give you an example, for this specific offer I just got, I ask for 50% higher
than my current salary, an offer he made was only 15%, so we eventually
negotiating and I got 40%, so how did work was that
I made the first offer, so I had the anchor effect about 50%, so no matter how much you negotiate, he need to negotiate around
the original number I had. On the other hand, if
I let him to go first, he go as a low ball offer at 15%. Do you think I have confidence that already go for 50%? I will probably negotiate
around where he is, he eventually change from 15% to 25%. You know the big difference
between 40% and 25%? That’s what called ‘anchoring effect’. I with you, I understand, as
a woman we always have lots of fear and the stress. Early in my career I had the same feeling. What if I ask the offers too high? They might take away the offer or what if they think
I’m there for the money if I ask for too much money? Or if they think I’m too aggressive? They wouldn’t have a
good relationship with me when I joined the team. I felt the same way earlier
when I started the career. What I also learned is that
the way to remove this fear is to do exceptional well research, for example: I did research to understand what’s the market rate of a
director of product management in a fortune 500 company, how much my current
manager in my old company is getting paid right now, so I have a very specific
number in my head. This is a fear number, but
to have the fair number, which is in this case, 40%
higher than my current salary, then I ask for another 10% higher to leave a margin in, so
that we can negotiate, eventually meet this final
number I’m looking for. Usually in this negotiation process, the way you achieve this confidence came from lots of daily practice and also gradually build
your confidence to get there. My name is Nancy Li, I had mission which to
help women to get more of what they want in life and in work. I’m going to teach a course in this case, a workshop in how women
to learn how to negotiate, specifically focus on the fear. How to address the fear behind it, so that you can achieve
your full potential in terms of negotiation in life and work. So if you are interested in
the new content I’m promoting, please describe below any
interest in my course, sign up down below so you
can get more information about the course and also more free tips. Thank you, have a good day. (upbeat music)

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